Support

Windows XPM is an interesting feature for Windows 7, it allows Windows XP applications to run under the same desktop with Windows 7. Unfortunately, Not all PC’s will support the new Windows XP Mode under Windows 7. The processor must support a feature called “hardware virtualization”, which is not supported in many Intel & AMD processors. In addition, even if your CPU does support hardware virtualization, your BIOS must also support it. If you have an older bios that can’t be updated and a chip that does support hardware virtualization, you’ll still be out of luck in using Windows XPM in Windows 7.

UPDATE: Microsoft has released an update for Windows XP Mode to allow for compatibility with processors without hardware virtualization.  For best performance, Microsoft recommended a hardware virtualization CPU.  

From Microsoft:

Although OEMs have been shipping hardware virtualization in PCs for three years, hardware virtualization is not available in all PCs — so even if your PC is new, it may not have hardware virtualization. Additionally, those PCs with hardware virtualization have it turned off by default, so you will need to turn on the hardware virtualization capability before you can use it.

More info on Microsoft’s site:

http://www.microsoft.com/windows/virtual-pc/support/configure-bios.aspx

A download tool is available to test your processor for both Intel and AMD. Please see Microsoft’s site for download links.

Tom’s Hardware has a good article on this:
http://www.tomshardware.com/news/windows-xp-mode-virtualization-intel,7709.html

Ed Bott’s compiled a list of processors with the VT support.
http://blogs.zdnet.com/Bott/?p=946

Desktop CPUS
Core 2 Duo

Processor	Supported
E4300/4400/4500/4600/4700	NO
E6300/6320/6400/6420/6540/6550	YES
E6600/6700/6750/6850	YES
E7200/7300/7400/7500	NO
E8190	NO
E8200/8300/8400/8500/8600	YES

Core 2 Extreme

Processor	Supported
QX6700/6800/6850	YES
QX9650/9770/9775	YES
X6800	YES

Core 2 Quad
Q6600/6700 YES
Q8200/8200S/8300/8400/8400S NO
Q9300/9400/9400S YES
Q9450/9550/9550S/9650 YES

Core i7/Core i7 Extreme
I7-920/940 YES
I7-965 YES

Pentium D/Pentium EE
805/820/830/840 NO
915/925/935/945 NO
920/930/940/950/960 YES
955/965 YES

Pentium for Desktop
E2140/2160/2180/2200/2220 NO
E5200/5300/5400 NO

Mobile CPU products

Core 2 Duo Mobile
L7200/7300/7400/7500 YES
P7350/7450 NO
P7370 YES
P8400/8600/8700/9500/9600 YES
SL9300/9400/9600 YES
SP9300/9400/9600 YES
SU9300/9400/9600 YES
T5200/5250/5270/5300/5450/5470 NO
T5500/5600 YES
T5550/5670/5750/5800/5850/5870/5900 NO
T6400/6570 NO
T7100/7200/7250/7300/7400 YES
T7500/7600/7700/7800 YES
T8100/8300 YES
T9300/9400/9500/9550/9600/9800 YES
U7500/U7600 YES

Core 2 Extreme Mobile
QX9300 YES
X7800/7900 YES
X9000/9100 YES

Core 2 Quad Mobile
Q9000 YES
Q9100 NO

Core 2 Solo
SU3300/3500 YES
U2100/2200 YES

Core Duo
L2300/2400/2500 YES
T2050/2250 NO
T2300/2400/2500/2600/2700 YES
T2300E/2350/2450 NO
U2400/2500 YES

Core Solo
T1300/1400 YES
T1350 NO
U1300/1400/1500 YES